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Ballmer's big regret at 10: Losing the interwebs

Wrong patience, lost talent

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Steve Ballmer's biggest regret of the past ten years? Impatience.

Ten years after taking over as Microsoft president - and eight years after replacing Bill Gates as chief exec - Ballmer has told The Wall St Journal that impatience prevented Microsoft from pursuing a Google-like paid search business back in 1999.

According to the WSJ, Microsoft started a paid search project that year - before killing it after only two months.

"The biggest mistakes I claim I've been involved with is where I was impatient - because we didn't have a business yet in something, we should have stayed patient," Ballmer said.

"If we'd kept consistent with some of the ideas" that Microsoft had in-house in 1999, he continued, "we might have been in paid search".

But Steve is spinning here. Microsoft's track record shows it has no problem pushing into markets where it doesn't have a business. With the foundations of Windows and Office laid, Microsoft went on to tackle business applications, gaming consoles, and mobile. How we scoffed at Microsoft for going up against SAP, Sony, and Palm.

Ballmer has even gone on record as saying Microsoft's secret is its "tenacity, persistence, patience". While Microsoft is rarely the first to market, it can always leverage its size when battling market incumbents.

Truth be told, patience is Microsoft's strongest asset. After more than eight years in the mobile and gaming console markets, the picture is mixed: Windows Mobile's market share is declining, while the Xbox has grown against the mighty Sony's Playstation. Microsoft's entertainment and devices unit - home to Mobile and Xbox - has yet to turn a profit.

Business applications - including its enterprise resource planning and customer relationship management - have a strong presence. But the journey has been difficult - bedeviled by product slips and missed revenue targets. Today it's difficult to accurately measure biz app revenue. In 2006, Microsoft merged its business application unit with the infinitely-more lucrative Office unit.

Here lies the explanation of why Microsoft is where it is today - number three in internet searches - and where Microsoft really was back in 1999. And lack of patience isn't the problem.

At the turn of the millennium, Microsoft made the decision that the PC remained its destiny and that the internet was a threat to Microsoft's hard-won desktop business.

That decision had damaging consequences. It lead to an exodus of the brains that could - and likely would - have built the platform that could have taken Microsoft online and made it a serious contender. These were the brains who'd put the building blocks of Microsoft's internet platform in place in the 1990s and were ready to go to the next level.

More than any missed corporate acquisitions like Yahoo! or Overture, it was the brain drain that hurt Microsoft. The engineering talent and executive expertise that built out Windows on desktops and servers - and that began looking to the web and could have engineered and integrated an organic system - was no longer part of the company's product DNA.

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